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Cost Control & Margin Improvement
Antonio Mallardo
The Hidden Costs Eating Your GOP and How to Spot Them
Why Cost Control Matters
- Margins are tightening across the industry
- Stronger visibility = stronger GOP
- Even small hotels can operate like big brands
Hidden Costs Eating Your GOP
1️⃣ Unmonitored F&B waste
2️⃣ Payroll creep during low occupancy
3️⃣ Poor supplier contract terms
4️⃣ Utilities inefficiencies
5️⃣ Incorrect cost allocations
2️⃣ Payroll creep during low occupancy
3️⃣ Poor supplier contract terms
4️⃣ Utilities inefficiencies
5️⃣ Incorrect cost allocations
How to Spot These Costs Early
- Compare theoretical vs. actual costs
- Weekly labour productivity review
- Track waste & variance logs
- Renegotiate contracts annually
- Review department allocations monthly
Using Cost Allocation to Drive Accountability
- Correct allocations help teams understand real cost impact:
- Utilities based on sqm/usage
- Admin overheads by revenue share
- F&B shared costs split by outlet
- Better allocation → stronger ownership.
F&B Metrics Every GM Should Track
1️⃣ Cost of Goods Sold %
2️⃣ Waste % vs. sales
3️⃣ Labour cost per cover
4️⃣ Average check growth
2️⃣ Waste % vs. sales
3️⃣ Labour cost per cover
4️⃣ Average check growth
- Small improvements compound into big margin gains.
The Outcome
- Effective cost control delivers:
✔ Higher GOP margins
✔ Stronger forecasting accuracy
✔ Better operational discipline
✔ Improved owner confidence
